III. PROSECUTING STATE AND LOCAL CORRUPTION
1) All of the states and most local governments have criminal statutes or codes
which criminalize various aspects of corruption.
2) While there is no federal statute which is aimed specifically at state and local
corruption, there are three statutes which have been generally utilized by federal
prosecutors to prosecute state and local officials for acts of corruption.
They are the mail and wire fraud statute, (the Hobbs Act for what the Town paid toto Hutcherson without council approval,) and the Racketeer Influenced and
Corrupt Organizations Act (“RICO”).
B. Hobbs Act – 18 USC §1951
1) The Hobbs Act by its express language makes it a crime to obstruct, delay, or
affect commerce by robbery or extortion.
2) However, the statute by a series of judicial decisions, including a United States
Supreme Court decision (See, United States v. Evans, 504 U.S. 255 ), has
been extended to cover practices best characterized as bribery. In that regard, all
that has to be shown is that a public official has obtained a payment to which he
was not entitled, knowing that the payment was made in return for official acts.
This results in making the Hobbs Act similar to 18 USC §201 insofar as it covers
bribery of a federal official. However, the statute would not cover mere receipt
of gratuities, as under 18 USC §201, which is covered by the mail and wire fraud
3) While the Hobbs Act is limited to conduct that “obstructs, delays or affects
interstate commerce [commerce between two or more states],” this requirement is
hardly any requirement at all since all that is needed is a small or practically
4) A Hobbs Act violation may serve as the foundation for RICO offenses.
C. Mail and Wire Fraud – 18 USC §§1341 (Mail), 1343 (Wire)
1) The mail and wire fraud statutes were enacted as anti-fraud statutes, designed to
combat as criminal the common law crime of larceny by trick. Even thought the
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statutes’ terms do not specifically embrace corruption, they are extensively used
to prosecute acts of public corruption.
2) For mail fraud, the prosecutor must prove only (a) a scheme to defraud, and (b)
the mailing of a letter for the purpose of executing the scheme; and for wire
fraud, the prosecutor must prove only (a) a scheme to defraud, and (b) the use of
interstate wire communications in furtherance of the scheme. For purposes of the
statute, the requisite mailing can be done through the postal service or a private
carrier, and the requisite wire communications include radio transmissions,
telephone calls and e-mails. Significantly, the requisite mailing or wiring need
not itself contain any fraudulent information and may be entirely innocent.
However, they must be shown to be at least a “step” in the scheme. (Schmuck v.
United States, 489 U.S. 705, 712 ).
3) With respect to the statutes’ use in public corruption cases, a fraudulent scheme
includes “a scheme . . . to deprive another of the intangible right of honest
services.” (18 USC §1346). It is this definition which makes the statutes a
flexible tool for prosecutors to prosecute public corruption at the state or local
4) A typical “honest services” corruption case arises in two situations. First,
“bribery” where the public official was paid for a particular decision or action,
which includes a pattern of gratuities over a period of time to obtain favorable
action. Secondly, “failure to disclose” a conflict of interest, resulting in personal
enrichment, which encompasses circumstances where the official has an express
or implied duty to inform others of the official’s personal relationship to the
matter at hand even though no public harm occurred or there was no misuse of
office. As to the “conflict of interest” situation, the basis for its condemnation is
that “[w]hen an official fails to disclose a personal interest in a matter over which
he has decision-making power, the public is deprived of its right either to
disinterested decision making itself or, as the case may be, to full disclosure as to
the official’s potential motivation behind an official act.” (United States v.
Sawyer, 85 F3d 713, 724 [1st Cir. 1966]). Notably, a person who holds no public
office but participates substantially in the operation of government, e.g., a
political party leader, may be subject to prosecution under an “honest services”
theory. (See, United States v. Margiotta, 688 F.2d 108 [2d Cir. 1982]).
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5) While there is the need to show in a bribery case an intent to give or receive
something of value in return for an official act, in a failure to disclose case, the
failure is itself sufficient to show the requisite intent. Moreover, there is no need
to show the scheme came to fruition or caused harm.
6) A public official may be charged with a separate count for each mailing or wiring
in furtherance of the charged scheme.
7) In 2002, Congress amended the statutes to allow for a maximum sentence of up
to 20 years imprisonment for each violation of the statutes.
8) A violation of the statute serves as the foundation for RICO offenses.